Q: In a divorce settlement, one spouse will keep the house & refinance the mortgage. The Closing Costs will be split 50/50
The refinance settlement statement requires 13 months of Escrowed FUTURE Hazard Insurance and 4 months of Escrowed Taxes.
Is the one leaving the property responsible for the FUTURE Escrowed taxes and hazard insurance since they will not be on the mortgage or own the property for the next (future) year that is being escrowed?
A: Unless the settlement agreement says otherwise, the party keeping the house is responsible for all FUTURE expenses. Future escrows should be excluded from the 50/50 closing costs. However, any left over escrow from the prior mortgage would be divided 50/50 and the party keeping the house could apply that to the future escrow.
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A: Sadly, I think this was an unanticipated matter not really addressed by your settlement agreement. I think the recipient of the home could argue that these are closing costs. I think you could argue that not all costs in the settlement statement are closing costs. I think you ought to discuss this with your ex or your ex's attorney to see if this is even a matter of dispute. If your ex is claiming these are closing costs, you may want to file an expedited motion for clarification so you do not hold up the refinance. I highly suggest you consult a local attorney who can review the settlement agreement in and discuss this matter in greater depth.
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